Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues:
Whether payment of administration fee by RRSP agent (manager of mutual fund company) is a prohibited advantage under paragraph 146(2)(c.4).
Position:
No.
Reasons:
Previous interpretations (E9204786 E9404855) state that (iv) would except.
XXXXXXXXXX 964010
Attention: XXXXXXXXXX
January 9, 1997
Re: Registered Retirement Savings Plan ("RRSP")
Trustee or Administration Fees
This is in reply to your facsimile transmission of December 3, 1996, in which you ask whether the payment of the above-noted fee by the agent of the RRSP trustee would contravene paragraph 146(2)(c.4) of the Income Tax Act (the "Act"). You indicate that you wish us to confirm an earlier interpretation (our document numbers E9404855 and E9204786).
Paragraph 146(2)(c.4) of the Act prohibits the plan from extending an advantage (that is conditional on the existence of the plan) to the annuitant or to a person who does not deal at arm's length with the annuitant, other than four excepted advantages. Subparagraph 146(2)(c.4)(iv) of the Act excepts the advantage extended to an annuitant which is derived from the "provision of administrative or investment services in respect of the plan".
Thus it is our view that where the terms of the RRSP plan document provide that the trustee or administration fee may be recovered from the plan funds, the payment of such a fee either with plan funds or by the agent of the RRSP trust does not contravene the condition in paragraph 146(2)(c.4) of the Act. Although the foregoing comments are not binding on the Department, we trust they will be of assistance to you.
Yours truly,
for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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